What has happened to Western liberal idea?

In the recent interview with President Putin, the Financial Times seems to have launched a discussion on liberalism only at its own peril. Inadvertently, a real problem was touched upon, whose pressing nature is no longer denied by anyone in the West. The newspaper had to admit it in its Editorial of 29 June. Its authors claim that the threat to liberalism comes from within, including President Trump and his policies, Brexit and, certainly, the rise of “populist nationalism”. They refer to voters’ disillusionment with liberalism and loss of confidence in the economic system and trust in political elites. The latter are invited to redouble their efforts to take into consideration issues raised by voters and “to renew liberalism”.

Hence, the Russian leader has only identified a problem that Western elites are unable to acknowledge, desperately defending the status-quo as having no alternative. But where is the problem?

The systemic crisis of Western society, if we are to call a spade a spade, has its roots in Reaganomics and Thatcherism. In early 1980s, disregard for the lessons of the Great Depression led to Anglo-American attempts to sort of try the pre-1929 Pure Capitalism. This unleashed the forcers of a “self-regulated market” with the state playing a minimal role – a key concept of liberal economics. The idea of social accountability of business had no place in that system.

At the same time, financial sector was deregulated through the step-by-step repeal of the Glass-Steagall Act, which was one of key elements of Franklin D. Roosevelt’s New Deal. Its architect was British economist John Maynard Keynes. It was only natural that the 2008 crisis also started in the financial sphere which had practically lost touch with the real sector of economy.

Then neoliberalism (as it became known) came to be imposed by Anglo-Saxon nations on the whole of the EU through the Lisbon agenda. The then Prime Minister Tony Blair was pretty good at it. When asked what she considered as her key legacy, Margaret Thatcher pointed to Blair who continued her economic policies under the “New Labour” slogan.

For instance, everyone knows what the nationalization of British railways led to. Profits are reaped by operators, while costs are borne by taxpayers who finance UK Rail, the state-run company responsible for railroad infrastructure. And this is not the only way to privatise profits while collectivising costs. In fact, globalisation has become one such practice for Western elites. Its original motive was quite liberal and far from being altruistic or even geopolitical (Donald Trump has reassessed this part of it when he blamed globalisation for China’s economic rise). It was about cheap labour for increased profits. The jobs  that were to be transferred abroad should have been compensated for by a new technological revolution. But it’s not happening, not even in the second generation. Information technologies do not create as many jobs, and we are already talking of robotisation and artificial intelligence, as well as a universal minimum living allowance as a solution to the problem of poverty and unemployment. It was Keynes who said: “Free trade assumes that if you throw men out of work in one direction you re-employ them in another. As soon as that link is broken the whole of the free trade argument breaks down”.

Liberalism in politics, especially after the end of the Cold War, has degenerated into averaging and alternative-free policies in the “end of history” spirit. Even Henry Kissinger admitted in his “World Order” (2014) that Western elites had again relied on automaticity, as was the case with the market. But as it was shown by Karl Marx supported by modern economists (Joseph Stiglitz, Paul Krugman, Thomas Picketty and others), free markets always give advantage to the investing classes, which only leads to more inequality.

In this respect, the 45-year post-WW2 period was an exception to the rule due to the creation of a social welfare state – the one that is now being destroyed by the neoliberal economics. Along with it the middle class is being destroyed – the pillar of Western democracy. For these reasons the real discourse of democracy is being substituted in the West by a discourse of liberalism. This involves labelling all protest voters as “populists” and “nationalists”, allowing to side-step the issue of the inability of the actual political system to represent this silent majority. Yet, that is what’s going on when differences blur between the Right and the Left, Tory and Labour in Britain, Republicans and Democrats in the US, or Christian Democrats and Social Democrats in Germany’s “Grand coalition”. Is it any wonder that when an opportunity arises to have a say, this majority votes for Brexit, Trump, or newly-created anti-system parties and movements, often with marginal ideologies?    

In social terms, as BBC is trying to explain in this ongoing debate, liberalism is about protecting the rights of minorities of all kind, including transgender persons. It turns out that there’s nobody to protect the interests of the majority. Yet, we are speaking of the post-war “social contract”, which simply does not work in liberal economics. Anglo-Saxons are on the path of further liberalisation, which the continental Europe cannot afford. Boris Johnson, contributing to the discussion, has said the other day that Brexit is precisely aimed at giving a new lease of life to it by following the US in income tax reductions for business and private individuals.    

British political analyst David Goodhart (in “The Road to Somewhere: The Populist Revolt and the Future of Politics”, 2017) shows another perspective of the issue. In his opinion, the elites have become cosmopolitan, but the majority has remained rooted in their own countries, regions and communities. In other words, the majority sticks to its national identity, unlike the elites. Even the European middle class, united by similar living standards and occupations, becomes aware of its nationality when hit by bad economic times.

Those who accuse Russia of meddling in internal affairs of Western countries are essentially denying their voters the right to vote, while the genesis of the liberalism crisis clearly points to its roots and origins inside the system. It was no-one else but Angela Merkel who in 2010 spoke of failure of multiculturalism in Germany, while calling for intensifying efforts at integrating immigrants into German society.

It was not Moscow that drew the attention to this problem. As early as 2007, the Economist wrote of a “secular overreachl” in the West, while today many are voicing concerns over a “liberal overreach”. Speaking broadly, it can be said that in the absence of a competitive environment in the realm of ideas after the end of the Cold War (which ended up doing a disservice to Western elites), liberalism has mutated into a dogma, a totalitarian ideology which does not tolerate dissent or pluralism of ideas. No wonder that the elites have resorted to political technologies, media control and political correctness to tighten the grip on the freedom of speech and generate semblance of an alternative-free existence. Social media have put an end to this, becoming a tool for politically alienated electorate to self-organize. As a measure to protect the status quo, the elites are now constructing an artificial dichotomy of liberalism vs authoritarianism, i.e. if not one, it’s definitely the other.

It is, therefore, not about the end of the liberal idea, just as President Putin pointed out, but that it cannot claim to be a one-size-fits-all model negating the wealth of ideas in Europe and the world. The problem is that any ideology, as history has shown, is always aggressive when it claims the ultimate truth, exceptionalism and, as a result, becomes a threat to the world. The notion of a “liberal world order” has also been introduced only recently, as a defensive reaction of the West when its dominance in global politics, economy and finance is coming to an end. Everything could have been different, had Western elites bothered to make this order, Bretton Woods institutions included, truly liberal, open and inclusive. Nobody was preventing them from doing so.